I think nerfing the dmg potential is pretty legit, as lategame lichbane can get pretty absurd, and complaining that it's abused for all in burst instead of sustained dps with a aa-skill-aa-skil rythem is also reasonable.
However, just lowering the dmg will just achive not much at all or nerf it into oblivion.
If they want it to be an sustained dmg tool that focuses on aa+skill combos, they should give it aditional mechanics/stats to support that direction.
They could change the Blasting Wand for an Fiendish Codex and ad 20% cdr along with the spellblade nerf to support the dps carracter instead of burst
They could give u a small shield whenever u use the spellblade effeckt to give some aditional tankiness, as focusing on sustained fights usually means u will need some sustain/durabillity
whatever they do, along with the less scaling on the spellblade, it needs to recive some buff that makes it better for prolonged fights